Hourly Rates – Does Location Matter?

The Wraith Test

It should be considered whether a particular firm of solicitors needed to carry out the work, where the claimant resides and whether there is sufficient local expertise to deal with the case in that area. The locality of where the work is carried out may have a bearing on the hourly rates recoverable. Usually the arguments centre around whether the paying party should have to pay London rates rather than provincial ones, given that these can be significantly higher.

When challenging the hourly rates, paying parties often argue that the hourly rates applicable are those where the Claimant resides as opposed to the where the Solicitor s/he instructs are based. So if the Claimant is located in York but instructs solicitors based in London. The argument that is raised is that an hourly rate that is reasonable for York should be allowed as opposed to London hourly rates which are higher

The test of whether it is reasonable to use a firm that is not local to the client was set out in Wraith v Sheffield Forgemasters Ltd [1998]. In this particular case, the claimant lived in Sheffield but instructed trade union solicitors in London.

When bringing a challenge, paying parties would often utilise online tools like the law society ‘find a solicitor’ search engine to obtain evidence concerning the availability of solicitors local to the claimant who were capable of carrying out the type of work in question.

In Wraith the instruction was unreasonable as the Claimant had no connection with London and the expertise need to adequately deal with the claim was available closer to the Claimant’s home address.

The case of A v Chief Constable of South Yorkshire Police [2008] ratified the test in Wraith and further diluted the evidence the paying party had to provide at assessment to support their Wraith argument

In the above case, the Claimant argued that the paying party had failed to demonstrate or provide evidence that local solicitors were available at the appropriate time with the same level of experience as the more expensive solicitors

Unfortunately the Judge found that the paying party could simply draw on the costs judge’s experience that less expensive solicitors were capable of conducting a particular type of litigation in the claimant’s locality, no particular evidence was needed.

Are there any exceptions?

In deciding whether or not it was reasonable to instruct a particular solicitor the court should have regard to:

  • the importance of the matter to the receiving party
  • the legal and factual complexities, in so far as the receiving party might reasonably be expected to understand them
  • the location of the receiving party’s home, place of work and the court in which proceedings were commenced
  • whether there was any well-founded dissatisfaction with a previous solicitor
  • any recommendation to consult the new solicitor
  • the location of the new solicitor
  • the knowledge of the likely fees of the solicitor compared with those of other solicitors who might reasonably have been considered

There is still a lot of room to argue that that the Wraith test does not apply to a particular set of costs if local solicitors were previously instructed but had not dealt with the matter appropriately for example

In Carpenter v Mid-Kent Healthcare Trust (Mayors and City of London Court 1 August 2001). The Claimant’s solicitors were recommended by the union to conduct a routine personal injury case. The defendant was unsuccessful in arguing that the claimant should have instructed local Maidstone solicitors, given the size and location of the town.

In Mattel v RSW plc [2004] instructed solicitors, while not local, were usually instructed by the client in cases of the instant type (infringement of trademark) and they had intimate knowledge of the client’s products.

In the case of William Albert Higgins v Ministry of Defence [2010] The master in the original decision concluded that “it would not be objectively reasonable to expect an 82 year old man who had just been informed that he was incurably ill, to undertake a trawl of local solicitors, in circumstances where an experienced consultant had given him the name of [F] as solicitors who specialised in this field“. The Ministry of Defence failed in appealing the original decision.

Our View

The particular circumstances of the case must be considered and cannot be ignored by the paying party who often fail to consider the individual facts of the case when making a ‘wraith challenge’

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